The average person, when buying a car for the first time, will find the financing process the most stressful aspect of the vehicle shopping experience. Many first time car buyers have a limited or troubled credit history and a lack of experience applying for loans that contribute to the sometimes complex auto financing procedures. You should know the important questions to ask, what to look for, and how to prepare yourself before you apply for your first car loan. 
Income and Budget
The first step in successfully financing your first car purchase is to create a realistic budget based on your actual monthly income. Auto loan application approval often comes down to two determining factors, the credit worthiness and repayment ability of the applicant. You should figure out exactly how much you can afford to pay each month in car loan payments before deciding the car you want to buy and how you want to finance the purchase.
While calculating your budget comfort-zone for car expenses, remember to factor in costs like maintenance, fuel, car insurance, and registration. A reasonable budget can help someone with poor or limited credit find a car that can be realistically financed a loan.
Know Your Credit
You should never allow yourself to be surprised by your credit score while attempting to purchase and finance a car for the first time. Every consumer is entitled to a free annual credit report, which means you have no excuse for not keeping up with the details of your official credit history. Look over your credit report for potentially harmful errors and places you can improve as you work toward a more attractive credit score. A good or excellent credit score will help you get approved for the best possible car loan.
Research
The car lot is an exciting place where things can move quickly from initial browsing to driving off the lot in a newly financed vehicle. Before getting swept away by the thrill of the car buying experience, research your car, loan, and dealership options online, from the controlled privacy of your own home. Ideally, you will have a specific car, price point, and financing plan in mind before ever setting foot on an actual used or new car dealership’s sales floor.
Consider a Cosigner
A cosigner can help you as a first time car buyer with limited or poor credit by making it easier to get an auto loan within your budget approved. The right cosigner will have better credit than you and an income that could support the payment structure. The cosigner will assume responsibility for the loan in the event you stop making payments. It is recommended you only use a cosigner you can trust and with whom you have a long-term history.
Research and planning are the two most important tools for first time car buyers. You should go into the shopping experience armed with a realistic budget, knowledge of your options, and an idea of whether or not you will be using a cosigner.
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